
Disney has structured a deal to acquire Character.AI’s technology and talent through the startup's Chapter 11 bankruptcy filing. Under the agreement, Disney hired the majority of Character.AI’s employees, including its CEO, and secured a license to its codebase for $5.5 million upfront, with an additional $12.5 million contingent on winning the IP auction. Crucially, the structure ensures Character.AI retains responsibility for ongoing litigation regarding chatbot safety, shielding Disney from legal exposure. This 'reverse acquihire' follows a similar 2024 arrangement with Google and raises concerns among legal experts about the use of bankruptcy to bypass traditional merger regulations.
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TechCrunch AI · September 18, 2026 · Related
Character.AI files for Chapter 11 bankruptcy
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